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IDCOL Solar Home System Program
Junaed Tazdik - Assistant Manager, SHS Program
Mafruda Rahman- Assistant Manager, Green Climate Fund (GCF)
Dissemination Webinar on
“Study to Investigate the Difficulties for Household Solar Home
System (SHS) in SAARC Region”
Tuesday, 6 March 2018
Operation and Maintenance of SHS: Case Study
Brief Introduction of Infrastructure
Development Company Limited (IDCOL)
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An Overview of IDCOL
• A fully government owned financial
institution
• Started operation in 1997
• Largest financier in private sector
infrastructure projects in Bangladesh
• Market leader in renewable energy sector
• Funded by the government and multiple
development partners i.e. the World Bank,
ADB, JICA, IDB, KfW, GIZ, USAID, DFID
and GPOBA.
• Total employees 362 (117 in head office
and the remaining in the regional office)
Power Solar Programs
Telecommunications Biogas Programs
Port ICS Programs
Products & Services
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Infrastructure
Renewable
Energy
Energy
Efficiency
Advisory
Services
• Long-term local and foreign currency loans
• Short-term local currency loans
• Debt and equity arrangement
• Concessionary financing and grant supports
• Technical assistance and quality assurance
• Capacity development of stakeholders
• Arranger of Carbon Credits
• Concessionary / market based financing
• Capacity development
• Corporate advisory services
• Training on Project Finance & Financial Modeling
• Training and Capacity Building on Renewable Energy
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Eligible Sectors
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• Power
• Telecommunications
• Information & Communication
Technology
• Ports
• Social Infrastructure
• Gas and Gas related
Infrastructure
• Water Supply and Sewage
• Toll Roads and Bridges
• Shipyards and Shipbuilding
• Hotel and Tourism
• Mass Transportation Systems
• Environmental Services
• Infrastructure Backward Linkage
Industry
• Energy Efficiency
• Public Private Partnership
• Solar Home System (SHS)
Program
• Biogas and Manure Program
• Other Renewable Energy
Programs/Projects
Gas Infrastructure
1%
Renewable Energy
60%
Environmental Services
1%
Health & Tourism
4%
Brick Klin
1%
Power
30%
IT & Telecommunications
1%
Port
2%
Total loan portfolio: USD 513 million
Sector-wise Loan Portfolio –
December 2016
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Renewable Energy Activities
Financed 4.1 Million SHS Installed 44,500 Biogas
Plants
8 Solar Mini grid Projects in
Operation
602 Solar Irrigation Pumps in
Operation
9 Biogas Based Power
Projects in Operation
Financed 1 Biomass Based
Power Projects
Energy Efficiency Initiatives
IDCOL Energy Efficiency program
focuses on:
1. Green Brick Program
2. Industrial Energy Efficiency
3. Improved Cookstoves ProgramFinanced 6 energy efficient
Auto-brick projects
Financed energy efficient
equipmentInstalled 960,000 ICS
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Advisory Services
• IDCOL Advisory Service focuses on:
1. Training & Capacity Building
More than 1,400+ professionals have been trained under various
training programs
2. Experience Sharing
IDCOL supported more than 150 professionals from over 10
delegation around the world including Uganda, Sudan, Guinea,
Ethiopia, Mali, Gambia, Niger, Senegal, Mauritania, Cambodia,
Pakistan, Nepal, Thailand, UK, and Switzerland for implementing
similar projects/programs in their country
3. Corporate Advisory
IDCOL initiated various corporate advisory services
Advisory Services - Activities
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R&D Initiatives
Phase I
Dye sensitized solar cell
Solar boat
DC nano grid
Solar rickshaw van
Solar hydrogen fuel
Solar charging station
Phase II
Solar cold storage (3 projects)
Municipal waste to biogas
Remote monitoring & prepaid billing of solar
irrigation
Phase III
Bio-film mediated system to increase biogas production
R&D on biogas production efficiency in
domestic biogas
*IDCOL approved funding of USD 1 million to 13 R&D projects.
* Findings will be available in 2017 and 2018.
R&D Initiatives
Solar charging station
DC nano grid
Solar rickshaw van
*Three projects are now completed.
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IDCOL’s SHS Program
What is a Solar Home System (SHS)?
Capacity Appliances Operation
20Wp3 W LED Lamp: 2
Mobile Charger: 14-5 hours
50Wp
3 W LED Lamp: 5
LED Color TV: 1
Mobile Charger: 1
4-5 hours
85Wp
3 W LED Lamp: 7
LED Color TV: 1
Mobile Charger: 1
12 W DC Table Fan: 1
4-5 hours
• Lead Acid Battery
• DC-DC Converter to run
color television, fan etc.
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Program at a Glance
▪ Target : 6 million SHSs by 2021
▪ Achievement : 4.13 million
▪ No. of beneficiaries : 18 million, 12% population
▪ Size of SHS : 10 Wp to 130 Wp
▪ Power generation : 150 MW (approx.)
▪ Fossil fuel saving : 200,000 ton/year
(USD 180 million/year)
▪ Job creation : 75,000 people
▪ IDCOL investment : USD 699 million
Year-wise Installation of SHS
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
11,697 20,635 27,579 37,151 69,562 103,301
169,916
325,067
468,978
643,810
852,400
723,078
448,085
189,280
34,590
INS
TA
LL
AT
ION
OF
SH
S
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Solar Maphttp://www.idcol.org/old/bd-map/bangladesh_map/
Program Structure
Supply Equipment
Pay for Equipment
Seeks grant & loan
Provide grant & loan
IDCOL
Technical Standards Committee
SuppliersSeeks approval
Provides approval
Operations Committee
POPO Selection Committee Select POs
Applies
Donors
Grant & soft term
credit
Repays loan
Household
Sells SHS & provide service
Pay down-payment & installment
LoanRepayment
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Fund Disbursement Process
Submission of disbursement request by PO to IDCOL
Rectification of problems and resubmission by POs
Inspection by SHS Inspectors and reporting
Adjustment of discrepant SHSs and
fund disbursement
Adding info into IDCOL database - Initial screening
IDCOL Solar MIS
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PO Selection Committee (TSC)
Structure:
Comprising representatives from:
▪ Institute of Development Studies (BIDS);
▪ NGO Affairs Bureau;
▪ Palli Karma Shahayak Foundation (PKSF); and
▪ Economic Relations Division;
Terms of Reference:
▪ Sets selection criteria for selection of POs
▪ Selection of POs based on the approved criteria
Frequency of meeting: As and when required
Year-wise Selection of POs
YearNumber of New
POs
2002 5
2003 4
2005 5
2009 7
2010 9
2013 17
2015 11
Total 58
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Technical Standard Committee (TSC)
Structure:
Comprising representatives from:
▪ Private Technical University (UIU);
▪ Public Technical University (BUET);
▪ University of Dhaka;
▪ Power Cell (Technical arm of Power Division);
▪ Rural Electrification Board (REB); and
▪ Local Government Engineering Department (LGED)
Terms of Reference:
▪ Sets technical specification of SHS and its components
▪ Approves products to be used based on these specifications
▪ Monitor quality control mechanism time to time
Frequency of meeting: Once in every month
Equipment Suppliers
EquipmentNumber of
SuppliersMajor Suppliers
Solar Panel 46 Energypac, Navana, Electro
Battery 17 Rahimafrooz, Rimso, Hamko, Panna
Charge Controller 53 Navana, Atersa, STECA
LED Lamp 44 Easy Electronics, G-tech
DC-DC convertor 13 SolarIC
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Operations Committee (OC)
Structure:
▪Chaired by the CEO, IDCOL
▪Members:
▪ Program-in-charges from all POs and
▪ Respective IDCOL officials
Frequency of Meeting: Once in every month
Major Agendas:
▪ SHS Installation performance of the POs
▪ Collection efficiency and Portfolio at Risk (PAR) 30 report
▪ Technical reports submitted by POs and IDCOL technical inspectors
▪ Implementation status of the decisions taken in the previous meeting
▪ Any issue related to implementation of the program
Mode of Financing: an Example
(a) Market Price of a 20 Wp SHS USD 140
(b) Buy-down Grant (Grant A) USD 20
(c) System Price for Household [(b)-(a)] USD 120
(d) Down Payment from Household to PO [15% of (c)] USD 18
(e) Loan Payable from Household to PO [(c)-(d)] USD 102
Loan Tenor 2 years
Interest Rate 16% p.a.
Monthly Installment Amount USD 5
(f) IDCOL Refinance [80% of (e)] USD 82
Loan Tenor 5~7 years
Interest Rate 6~7% p.a.
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A Sustainable Financing Structure
Phased -out Subsidy
2003 2004~5 2006~7 2008~9 2010~11 20122013
onwards
Capital Buy down Grant $70 $55 $40 $40 $25 $25 $20*
Institutional Development
Grant$20 $15 $10 $5 $3 $0 $0
Concessional to Semi-Commercial Credit
2003~8 2009~11 2012~15 2016
Loan Tenor 10 yrs 6-8 yrs 5-7 yrs 5-7 yrs
Interest Rate 6% 6%-8% 6%-9% 6%-7%
% of Loan Refinanced 80% 80% 70%-80% 70%-80%
*only for smaller SHS
Fund Flow and Role of Partners
• Provides grant and soft loans
• Provides technical assistance
• Provides grants to reduce cost
• Provides soft loans
• Provides training, promo support
• Monitoring
• Identifies potential customers
• Installs SHS
• Extends credit
• Provides after sales services
Debt Service
Debt Service
Debt Service
Debt Service
• Provides
grant and
soft loans
to IDCOL
• Provides
policy
support
• Maintains
system
• Repays loan
in monthly
installment
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Clean Development Mechanism Fund
▪ IDCOL SHS program was registered as a CDM program with UNFCCC
in 2012.
▪ IDCOL signed agreement with the World Bank to sell CERs (Certified
Emission Reductions) under the program.
▪ UNFCCC issued 461,897 CERs for reporting period 2012 to 2015.
▪ Selling rate is EUR 9 per CER.
▪ CDM benefits has been passed through to the POs. IDCOL retained 25%
as administration cost.
Quality Control Mechanisms
• Physical inspection by technical inspectors of IDCOL
• Verification of collection efficiency by collection efficiency inspectors
• Independent technical and financial audit
Physical inspection
• Training for trainers
• PO Staff / customer training
• Supplier consultation
Training Programs
Call
Centre
IDCOL
POHousehold
Informs POLodges complain
Takes remedial measure
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Inspection & Monitoring
IDCOL has 12 regional offices across the country to inspect and monitor SHS
installations by various POs
Each regional office consists of a regional manager and 8-10 inspectors
Each inspector inspects around 300 systems every month
Any discrepancy identified on SHS units are updated into the database
Follow up with the POs is carried out on minor defects found in SHS
Current Organizational Structure of the
SHS Quality Control Team
Zonal Manager
Divisional Manager
Regional Manager
Deputy Regional Manager
Sr. Solar Inspector
Solar Inspector
Zonal Managers manages and monitors the activities of the
divisional and regional offices under his zone.
Divisional Managers supervise the activities of the regions
under his division and make sure the regional offices under
him are working properly.
Regional Managers supervises the inspection and other
activities of the inspectors of his region. He prepares the
inspection schedule for his inspectors and prepare monthly
reports for the Head Office.
Deputy Regional Managers help Regional Managers and act
as the second in command in each regional office.
Sr. Solar Inspectors & Solar Inspectors inspect SHSs for
physical and technical verification. They only inspect the
systems installed within the regions they belong to.
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IDCOL Regional Offices under SHS Program
1. Dhaka
2. Faridpur
3. Barisal
4. Khulna
5. Barguna
6. Chittagong
7. Brahman Baria
8. Sylhet
9. Bogra
10. Rangpur
11. Mymensingh
12. Laxmipur
SHS Inspection Procedures
Solar Panel Checking
Load Checking
Measuring S.G of Battery
Charge Controller Checking
Measuring Battery Voltage
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SHS Inspection Forms
Post Inspection Data Entry
Step-1 Step-2
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Post Inspection Data Entry
Step-3 Step-4
Database Management
Details of every SHS installation by POs under the SHS program is registered in
database
Every SHS is identified by its unique solar PV panel serial number
No two entries can be made for the same SHS system - hence duplicate entries are
excluded
Inspection report updated for every inspected SHS unit
Any discrepant SHS system identified during inspection is excluded from the
program for funding
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Database Management Flow
POs install SHS & collect
household details
Households / SHS units
IDCOL receives installation reports
from POs, checks and updates
database
IDCOL inspectors inspect SHS units
and generate inspection /
discrepancy report
POs check with households and
fix discrepancy
SHS DATABASE
Snapshots of SHS Database
Household Information Lease Agreement Information
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Dedicated Customer Care Call Centre
IDCOL has set up a dedicated customer care call centre to which customers shall
report directly on system defects/maintenance issues, etc. during the 3 years
warranty period
Sample IDCOL Call Centre Sticker given to Customers IDCOL Call Centre Number printed on the Charge Controllers
Snapshot of Call Center Database
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After Sales Service
After 3 years of warranty, users can sign annual maintenance agreements with Pos
IDCOL provides incentives to customers if they replace the old batteries through POs
itself - this ensures safe disposal of used batteries by suppliers
Training manuals, booklets/brochures on SHS system operation and maintenance are also
prepared and provided to POs/customers
Consult
ancy
Firm
Development
PartnerTimeline
Number of SHS
Inspected
PSE KFW 2011-2014 9,500
BIDS TheWorld Bank 2011-2012 1,600
MJF The World Bank 2013 606
BIDS DFID 2015 462
Keystone JICA 2015-2018 3,579
15,747
* During the third party inspections, all the systems were found functional and without any major technical difficulties.
Evaluation by Development Partners
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Collection performance of the Program
A collection team of 18 field auditors
Total inspection as of Dec’16: 3,703 branch offices
Inspection percentage: 65% of branch offices
Overall collection efficiency: 85%
Offices with satisfactory (90%) performance: 68%
Training Program
Type of TrainingArranged
byParticipants
Trained
so far
ToTTraining IDCOL PO Officials 496
Management Training PKSFPO Officials at Head
Office202
Staff Training PO PO Field Staffs 30,197
Customer Training PO Customers 1,565,942
Technician TrainingTechnical
InstitutesLocal people 1,894
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Battery Recycling
▪ Battery recycling policy was adopted under the program in 2006.
▪ There are 4 ISO certified battery recyclers in Bangladesh.
▪ POs are required to collect old batteries while selling new batteries.
▪ Customers receive 24% of new battery price as salvage value.
▪ IDCOL inspected 94,210 warranty expired batteries since Nov’12.
▪ 91% batteries are functioning well
▪ 5% has been replaced
▪ Support from IDCOL:
▪ PO gets USD 5 for collection
▪ PO receives up to USD 100 as loan for each new battery sale
▪ Battery recycler get USD 5 for recycling
Pay-As-You Go (PAYG)/Prepaid System
IDCOL has a plan to introduce prepaid SHS system since February 2017.
A prepaid device will be installed on battery top to take control of the
battery.
The pilot phase was successfully conducted in an upazila (sub-district)
during August 2016 – November 2016.
3 local suppliers are currently providing the solution.
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Success Factors
Innovative financing structure - Ownership model
Financial contribution of all parties
Sustainable business model
Cost-efficient standardized technical design
Quality control and after sales service
Development of local support industries
Bangladesh’s micro-finance experience
Support from the Government, the World Bank and other donors
Current Challenges
SHS market outside IDCOL program
Free distribution of SHS under safety-net programs of the Government
Rapid expansion of REB grid
Collection performance of POs has deteriorated
Lack of customer awareness regarding the maintenance of the SHS
Lack of trained technical resources working on field
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Engaging POs in safety-net programs of the Government
Initiatives for Product/Business Diversification
Support from Rural Electrification Board (REB) in collection
National Standard for SHS through SREDA
Collection efficiency improvement program – CEIP
Mitigation Measures
THANK YOU